There are two types of franchise players, "exclusive" and "non-exclusive."
Clubs can designate an exclusive franchise player by offering a one-year contract for an amount no less than the average of the top five salaries at the player's position at the end of the restricted free agent signing period, or a 20 percent increase over his 2008 salary, or the average of the top five salaries at his position at the end of last season -- whichever of the three is greater. The offering club retains exclusive negotiating rights and other clubs cannot negotiate with exclusive franchise players.
A non-exclusive franchise player is offered a one-year contract for an amount no less than the average of the top five salaries at his position in the 2008 season, or a 20 percent salary increase, whichever is greater. The offering club does not hold exclusive negotiating rights, and the player can negotiate with other clubs. The original club may match any offer to retain the player, or receive two first-round draft choices as compensation if it elects not to match. The signing period for non-exclusive franchise players is from Feb. 27 through July 15. Clubs have until July 15 to sign franchise players to a multi-year contract or extension. After this date the player may only sign a one-year tender for the next season.
Clubs may designate a transition player by offering a one-year contract for an amount no less than the average of the top 10 salaries of 2008 at the player's position, or a 20 percent salary increase, whichever is greater. A transition player designation gives the club a first-refusal right to match an offer sheet within seven days given to the player by another club. If the offering club does not match the offer sheet, it receives no compensation. Transition players can be signed from Feb. 27 to July 22.